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Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on
Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 80,000 T- shirts: Sales $2,000,000 Cost of Goods Sold $1,073,600 Gross Profit $926,400 $688,800 Operating Expenses ($180,000 is fixed) Operating Income $237,600 $71,280 Income Taxes (30% of operating income) Net Income $166,320 If the concert season is slow due to poor weather, Baskin estimates that sales could fall to as low as 60,000 T-shirts. (i). In a flexible budget for sales of 60,000 T-shirts, how much would Baskin budget for operating expenses? Select one: a. $516,600 b. $381,600 c. $688,800 d. $561,600
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